"We said what we were going to do and the French voted for it," Prime Minister Edouard Philippe said while unveiling the decrees containing the reform.

Here are the most important points from the reform plans. (The substance of the plans is subject to change by the government, and could potentially be blocked by France's Constitutional Court, which is due to review the decrees starting September 28.)

1. More emphasis on in-house labor talks as opposed to sector-level discussions

This is a major change. Workers and employers would be free to negotiate agreements within the confines of an individual firm, as opposed to during sector-wide talks comprising dozens of firms that often have little connection to one another. In the case of a downturn, a company would be able to strike a rapid, "simplified" deal with a union or works council to change wages or working hours to better suit the new market conditions.

This is a move toward German- or Swedish-style labor negotiations, depriving formidable French unions such as the CGT of some of their power. What remains to be seen is exactly what terms can be negotiated in-house, and how the legal system responds to the change.

2. A firm's global economic health can't be used to oppose plans to fire workers

In France, any plan to lay off multiple workers needs to be approved by a chamber of commerce. In the past, a judge could block layoff plans or penalize the firm by pointing out that its global operations were profitable and the dismissals were not justified. Under the new plans, judges could only refer to the firm's performance in France when deciding whether to approve a layoff plan. This is a major shift as global profitability was the central issue in many recent controversies over company shutdowns, including at ArcelorMittal's Florange steelworks in 2013.

3. A set scale for damages in the event of wrongful dismissal

This one is guaranteed to anger unions. In the event of wrongful dismissal, a firm would have to pay damages according to a set scale starting at three months' salary for every two years of employment. At present, every professional sector has guidelines on wrongful dismissal damages, but these are notional. Most cases are handled in an arbitration process that can result in massive payments, a process that many firms find unpredictable. Companies have long demanded more clarity. As an olive branch to unions, the government is offering to increase minimum damages for dismissal.

4. Red tape slashed for firms with more than 50 employees

This is sure to cause cheers in many boardrooms. Currently, when a company hires its 50th employee in France, it must comply with a long list of requirements, notably the nomination of workers' representatives and the setting up of a works council and a health and safety committee. Under Macron's reform plans, all three of these groups will be folded into a single structure, cutting down on costs. Separate health and safety committees will remain in high-risk sectors like nuclear power.

5. Changes to short-term job contracts, but not to long-term ones

The terms of France's most common short-term job contract (the CDD) had been set by law, which determined its minimum length and how many times it could be renewed (a maximum of twice). The system is open to abuse, with firms routinely rehiring employees on short-term contracts after a hiatus to avoid the cost of giving the worker an ironclad, long-term contract (the CDI). If the decrees are approved, duration and renewal terms will be set at the level of the professional sector, not by national law. So for example, the newspaper industry could decide that the minimum duration for a short-term contract is 4 months, and it can be renewed 6 times.

However, the government is making no change to the CDI contract. Its strong protections are often blamed for France's "insider-outsider" labor system, under which some employees enjoy top-notch job security, while others struggle from one short-term contract to another. Bank loans and all forms of credit are heavily conditioned on the possession of a CDI job contract.

You say: “Currently, when a company hires its 50th employee in France, it must comply with a long list of requirements, notably the nomination of workers’ representatives and the setting up of a works council and a health and safety committee. Under Macron’s reform plans, all three of these groups will be folded into a single structure, cutting down on costs. ”
But the riggering of all these new obligations will remain, surely?

Posted on 9/1/17 | 5:11 PM CET

felix

A key provision of the new ‘reforms’ is the limit of the courts jurisdiction. Specifically no matter how wronfully you are dismissed the most you can get from courts is 20 months pay. This is a sure loophole calling for abuse. Let me illustrate: 1) You got pregnant? You’re fired! 2) You refuse to sleep with the boss? You’re fired? 3) Management asked you verbally to falsify the records to defraud the tax authorities -and make it look like it’s your idea- and you’re still thinking about it? -You’re fired! 4) management asked you to be an accomplice in defrauding the stockowners, and you are not going along? -You’re fired! 5) You have a contract saying you receive X$/month? Management asks you to ‘vountarily agree’ to half of that so that they can multiply their bonus. You refuse? You’re fired! 6) Management asks you to do something ILLEGAL and you don’t seem too enthusiastic about it? You’re fired! 7) Management SLANDERS you and fires you for THEIR INCOMPETENCE. You go to court and PROVE that- you’re still fired and get at most 20 months’s salaries. In effect a contract is no longer a contract, it’s charity! The most you can get for wrongful termination of employment is 20 months’s salaries and that is if you have been working in the company for 20 years! Enron would LOVE such laws-whistleblowers are thrown to the dogs. It’s also an apartheid law: If you are say a football player earning 1M/year on a 3-5 year contract and the team makes use of such laws to lower your pay to half (thus reneging on the CONTRACT), you go to the courts , the courts will give you about 2 month’s pay according to that law, but FIFA would EXCLUDE the team from all competitions. Well, in Macron’s France, some are more equal than others. Basically a contract is no longer a contract. Wonder how attractive this prospect sounds.

Posted on 9/4/17 | 9:17 AM CET

Great

Yeah, it says something when governement ties justice’s hand behind their back. It says something when law caps penalties for WRONGFUL dismissal.
What is the message exactly? Encouraging not abiding the law?
5 years at the job will net you 6 months… for WRONGFUL dismissal. How ridiculous is that?

Posted on 9/4/17 | 10:36 AM CET

croc

Could this be the way France and french companies will deal with foreign e.g east European workers when they ‘need’/ ‘must’ replace them for official ‘french’ workers??

Posted on 9/4/17 | 3:36 PM CET

@croc

No need for that. Low qualification foreign contractors are already outsourced to shoddy temporary agencies often located in Eastern Europe and that will just disappear in case of problem. That when they just don’t run away with the money…